Option 1. Crowdfunding Through Kickstarter
The first is Kickstarting, or broadly speaking, crowdfunding. Through crowdfunding, what you’re doing is pre-selling your product to a large market under the assumption that your product might be very early stage.
What you’re able to do through crowdfunding, and some of platforms like Kickstarter, is market your product to a large audience and use that as a way to finance your business. Many consumer products, and those related to arts and crafts, have used Kickstarter, IndieGogo, and other platforms as a way to get their businesses off the ground, while other forms of financing could have been very difficult to acquire.
Related: Beware of Crowdfunding: Choose Your Options Carefully
On Kickstarter, the key is being able to find something that has a mass-market appeal and a very unique story. Businesses that are able to tap in and make an excellent video and an excellent pitch have found tremendous success on Kickstarter. It’s another new platform among others to use to finance your business.
Option 2. Equity Crowdfunding
Another way to crowdfund your business is actually through equity crowdfunding. With equity crowdfunding, what you’re able to do is crowdfund from many different types of investors and create a syndicate to pull that capital together.
Related: The 3 Biggest Questions Investors Ask & How to Answer Them
Similar to thinking about Kickstarting, you want to be thinking about a wide audience of investors who might be interested in your product or investing in your company. Through equity crowdfunding you can offer your early adopters and supporters a way to get some bonus in addition to simply purchasing your product.
Option 3. Grant Funding, SBIRs & STTR, Pitch Contests, Accelerators
Another alternative form of financing is grant funding. Grant funding is a great option for companies graduating out of labs, research institutions, and other academic organizations. Grant funding can provide a non-diluted form of financing to research and development-oriented businesses or products. It offers a way to raise a significant amount of money to further develop your idea.